The Dinar is the name of the official currency in several states. The Gold Dinar was a coin dating back to the early yearss of Islam, issued by many swayers, and the Islamic gold dinar is a modern resurgence of it as a coin or unit of history. Dinar is a basic pecuniary unit of currency in Algeria, Bahrain, Iraq, Jordan, Kuwait, Libya, Serbia, Sudan, Tunisia and Yemen. It besides a several units of gold and silver currency once used in Middle East.
The gold dinar is a coin made of 22K ( 91.7 % ) gold, in conformity to Islamic jurisprudence specifications. It has a specific weight of 4.25g and is merely under one inch in diameter. If the gold monetary value is $ 470 per ounce, the value of one dinar is about $ 58. A Gold Dinar is a gold coin foremost issued in 77 AH ( 696-7 CE ) by Caliph Abd al-Malik ibn Marwan. The name “ dinar ” is derived from Grecian “ dinarion ” intending “ give ” and the Latin “ denarius ” was a common Roman currency or coin.
Both dinars and dirhams ( silver coins ) were used by the Muslim universe as far back as the clip of the 2nd Caliph, Umar ( AD 632 ) , until the autumn of the Ottoman Caliphate in 1924.
By merchandising with the gold dinar alternatively of currencies pegged to the bill. It is believes that international trade would increase, as exchangeA rates would no longer be capable to arbitrage. Companies would besides profit as at that place would no longer be the demand to fudge fiscal minutess.
The gold coin represented by an international unit used by national Bankss to settled trade among states. This ‘virtual dinar ‘ overcomes the obvious physical restrictions of transporting gold coins.
History of Gold Dinar
In the yesteryear, Muslims use gold Dinar and Dirham as the official currency. However, when looking at the gold Dinar, this coin has a long history, one that dates back to Islam in the early yearss. The gold Dinar was besides the currency that lasted for a long clip, being issued by legion swayers.
Then for the Islamic gold Dinar, this currency was really connected to the resurgence of the currency in coin signifier, which was referred to as a “ unit of history ” , which is alone from other currencies addressed further in this article. The name of this currency, Dinar, is Arabic but derived from a Grecian word that translates to “ give ” . In add-on, this Grecian word is where the name of the first Roman coin came from known as the Denarius.
The first dated coins that can be assigned to the Muslims are transcripts of silver dirhams of the Sasanian Yezdigird III, struck during the Khalifate of Uthman, radiallahu anhu. These coins differ from the original 1s in that an Arabic lettering is found in the obverse borders, usually reading “ in the Name of Allah ” .
Since so the authorship in Arabic of the Name of Allah and parts of Qur’an on the coins became a usage in all mintings made by Muslims. Under what was known as the coin criterion of the Khalif Umar Ibn al-Khattab, the weight of 10 dirhams was tantamount to 7 dinars ( mithqals ) . In the twelvemonth 75 ( 695 CE ) the Khalif Abdalmalik ordered Al- Haddjadj to coin the first dirhams, therefore he established officially the criterion of Umar Ibn al-Khattab. In the following twelvemonth he ordered the dirhams to be minted in all the parts of the Dar-al-Islam.
He ordered that the coins be stamped with the sentence: “ Allah is Unique, Allah is Ageless ” . He ordered the remotion of human figures and animate beings from the coins and that they be replaced with letters. Gold and Ag coins remained official currency until the autumn of the Khalifate.
Since so, tonss of different paper currencies were made in each of the new post-colonial national provinces created from the taking apart of Dar al-Islam. This bid was so carried on throughout all the history of Islam. The dinar and the dirham were both unit of ammunition, and the authorship was stamped in homocentric circles. Typically on one side it was written the “ tahlil ” and the “ tahmid ” , that is, “ La ilaha illah Allah ” and “ alhamdulillah ” ; and on the other side was written the name of the Amir and the day of the month. Subsequently on it became common to present the approvals on the Prophet, salallahu alayhi Washington Salem, and sometimes, ayats of the Qur’an.
Gold and Ag coins remained official currency until the autumn of the Khalifate. Since so, tonss of different paper currencies were made in each of the new postcolonial national provinces created from the taking apart of Dar al-Islam.
Development of Gold Dinar
Today, the Dinar is still used in some states that are an Arabic or Arabic-influenced. Of class, depending on the state utilizing the Dinar, the design, every bit good as the codification would change.
The followers are the single states that still use the Dinar as the primary currency, along with the official name for that state and the ISP codification.
aˆ? Algeria – Algerian Dinar – DZD
aˆ? Bahrain – Bahraini Dinar – BHD
aˆ? Iraq – Iraqi Dinar – IQD
aˆ? Jordan – Jordanian Dinar – JOD
aˆ? Kuwait – Kuwaiti Dinar – KWD
aˆ? Libya – Libyan Dinar – LYD
aˆ? Republic of Macedonia – Macedonian Dinar – MKD
aˆ? Serbia – Serbian Dinar – RSD
aˆ? Tunisia – Tunisian Dinar – TND
Along with the list above of states that continue to utilize the Dinar, many others have stopped utilizing it. In add-on, the gold Dinar associated with King Offa of Mercia who reigned from 757 to 796 and the Abbasid Caliphate Dinar from 774. Interestingly, the coiner who was hired to bring forth the currency made major errors in the design in that he had no cognition of Arabic.
The states that at one clip used the Dinar but no longer make include the undermentioned:
aˆ? Abu Dhabi
aˆ? Republic of Serbian Krajina
aˆ? Republika Srpska
aˆ? South Yemen
aˆ? Serbia and montenegro
Presents, Dinar can be used in many ways.
First, it can be used as salvaging or investing. Gold have intrinsic value. Due to its beauty, rare and alone nature, gold is valued by mankind.A Since 5000 old ages ago until today, world still value gold. Historically, gold has been a proved method of continuing value when a national currency was losing value. By salvaging a part of gold as your plus you already hold a good fiscal insurance policy.
Following, Gold Dinar can be used to pay zakat. The actual significance of the word Zakat is: grow ( in goodness ) or ‘increase ‘ , ‘purifying ‘ or ‘making pure ‘ .
Zakat can merely be paid with touchable ware, called in Arabic ‘ain. It can non be paid with a promise to pay or a debt, called in Arabic dayn. From the get downing the zakat was paid with dinars and dirham. Most important is that the payment of zakat was ne’er allowed in paper money during all the Ottoman period right until the autumn of the Caliphate.
Under Islamic jurisprudence Zakat is a signifier of Muslin tithing to God for the support of the less fortunate or jehad and it is to be paid in gold or Ag, non paper currencies without any intrinsic value. Paper-money is called fulus, because it merely represents money and does non hold value as ware. It follows that since Zakat can non be paid in fulus, which has no value as ware, it can non be paid in paper-money, which value as weight of paper is void. On this footing, it becomes clear the pressing demand to reconstruct the usage of the Dinar and the Dirham as payment of Zakat
Harmonizing to Viewislam.com, ” Zakat ( or Zakaah ) is an obligatory signifier of charity on nest eggs. It is non an income revenue enhancement, but a nest eggs revenue enhancement. Its major receivers are the working hapless, who can non run into all of their demands without some extra aid, and the destitute, who can non even run into their basic demands. It is besides used to pay off the debts of those who are unable to pay off their ain debts, to liberate slaves and ransom captives of war and to accommodate the Black Marias of new Moslems who may non yet have a steadfast foundation of religion. Other lawful receivers are isolated travellers, those engaged in jehad and employees of the province working to roll up and administer zakaah. Their rewards come from it.
Third, Gold Dinar can be used as Mahr which means Mas Kahwin. The mahr ( dowery ) is something that is paid by the adult male to his wife.A It is paid to the married woman and to her merely as an award and a regard given to her and to demo that he has a serious desire to get married her and is non merely come ining into the matrimony contract without any sense of duty and duty or attempt on his portion.
One of the more common names for it is Al-Sadaaq which comes from the word sidq intending honestness or sincerity.A As-San’aani ( Book: A Subul As-Salaam ) explains its significance: A “ It indicates the earnestness of the hubby ‘s desire for his wife.A In the spiritual Torahs before us the dowery used to travel to the defenders. ”
Fourth, Gold Dinar can be used as a gift. Since gold is beauty, rare, hold its ain intrinsic value, addition in value over the clip and can non be destruct. It can be a really good gift. This cherished metal will be appreciated by homo. That is why we can see the older coevals go throughing gold to the younger coevals via gilded jewelry and other signifier of gold i.e. Ring, necklace, watchband and gold coin.
Last, Gold Dinar can be used as a legitimate medium of exchange to purchase and sell. Gold is money because it fulfils, to an extent unmatched by any other physical trade good, all the pre-requisites of a money. It was rare and prized long before the construct of “ money ” was of all time discovered. It has many other alone utilizations, and ever has had.
Gold ‘s beauty, scarceness, and the easiness by which it could be melted, formed, and measured made it a natural trading medium. Gold gave rise to the construct of money itself: portable, private and lasting.
But for about three thousand old ages Gold ‘s primary public-service corporation has been recognized as a medium of exchange. The history of Gold as money in modern coin signifier spans 2630 old ages, from 700 BC to about 1930 AD. The history of nil but paper and base metal and Ag coin in circulation spans about 40 old ages from 1930 to 1970. And the history of paper and base metal coin as “ money ” , with no connexion to Gold ( or Ag ) anyplace on Earth besides spans a period now nearing 40 old ages – from 1970 to day of the month.
Islamic View Of Gold Dinar
The following Hadith on Dinar is researched by Abdul Halim b. Abdul Hamid.
Here are some of the attested 1s, Insya’Allah.
/Book 10, Number 3895: /
Jabir ( Allah be pleased with him ) reported that Allah ‘s Apostle ( may peace be upon him ) said to him: I have taken your camel for four dinars, and you may sit upon it to Medina.
/Book 10, Number 3893: /
Jabir B. ‘Abdullah ( Allah be pleased with them ) reported: Allah ‘s Messenger ( may peace be upon him ) bought a camel from me for two ‘uqiyas and a dirham or two dirhams. As he reached Sirar ( a small town near Medina ) , he commanded a cow to be slaughtered and it was slaughtered, and they ate of that, and as he ( the Holy Prophet ) reached Medina he ordered me to travel to the mosque and offer two rak’ahs of supplication, and he measured for me the monetary value of the camel and even made an extra payment to me.
/Book 10, Number 3889: /
Jabir reported: We went from Mecca to Medina with Allah ‘s Messenger ( may peace be upon him ) when my camel fell badly, and the remainder of the Hadith is the same. ( But it in besides narrated in it: ) He ( the Holy Prophet ) said to me: Sell your camel to me. I said: No, but it is yours. He said: No. ( it ca n’t be ) , but sell it to me. I said: No, but, Allah ‘s Messenger, it is yours. He said: No, it ca n’t be, but sell it to me. I said: Then give me an ‘uqaya of gold for I owe that to a individual and so it would be yours. He ( the Holy Prophet ) said: I take it ( for an ‘uqiya of gold ) and you reach Medina on it. As I reached Medina, Allah ‘s Messenger ( may peace be upon him ) said to Bilal: Give him an ‘uqiya of gold and do some excess payment excessively. He ( Jabir ) said: He gave me an ‘uqiya of gold and made an add-on of a qirat. He ( Jabir ) said: The add-on made by Allah ‘s Messenger ( may peace be upon him ) was with me ( as a sacred trust for belssing ) and lay with me in a pocket until the people of Syria took it on the Day of Harra.
/Book 10, Number 3886: /
Jabir B. ‘Abdullah ( Allah be pleased with them ) reported that he was going on his camel which had grown jaded, and he decided to allow it off. When Allah ‘s Apostle ( may peace be upon him ) met him and prayed for him and struck it, so it trotted as it had ne’er trotted earlier. He said: Sell it to me for an ‘uqaya. I said: No. He once more said: Sell it to me. So I sold it to him for an ‘uqaya, but made the judicial admission that I should be allowed to sit back to my household. Then when I came to ( my topographic point ) I took the camel to him and he paid me its monetary value in ready money. I so went back and he sent: ( person ) behind me ( and as I came ) he said: Make you see that I asked you to cut down monetary value for purchasing your camel. Take your camel and your coins ; these are yours.
The above is from Sahih Muslim, Book 10: Minutess ( Kitab Al-Buyu ‘ )
This is besides another reliable Hadith collected by Imam Abu Dawud in his book Sunan.
/Book 16, Number 3322: /
Narrated Abdullah ibn Abbas:
A adult male seized his debitor who owed 10 dinars to him. He said to him: I swear by Allah, I shall non go forth you until you pay off ( my debt ) to me or convey a surety. The Prophet ( peace be upon him ) stood as a surety for him. He so brought every bit much ( money ) as he promised. The Prophet ( peace be upon him ) asked: From where did you get this gold? He replied: From a mine. He said: We have no demand of it ; there is no good in it. Then the Apostle of Allah ( peace be upon him ) paid ( the debt ) on his behalf.
/Book 16, Number 3325: /
Narrated Abu Hurayrah:
The Prophet ( peace be upon him ) said: A clip is surely coming to mankind when merely the receiving system of vigorish will stay, and if he does non have it, some of its vapour will make him. Ibn Isa said: Some of its dust will make him.
/Book 16, Number 3327: /
Narrated Abdullah ibn Mas’ud:
The Apostle of Allah ( peace be upon him ) cursed the 1 who accepted vigorish, the 1 who paid it, the informant to it, and the 1 who recorded it.
/Book 16, Number 3334: /
Narrated Abdullah ibn Umar:
The Prophet ( peace be upon him ) said: ( The criterion ) weight is the weight of the people of Mecca, and the ( criterion ) step is the step of the people of Medina.
/Book 16, Number 3341: /
Narrated Jabir ibn Abdullah:
The Prophet ( peace be upon him ) owed me a debt and gave me something excess when he paid it.
/Book 16, Number 3343: /
Narrated Ubadah ibn as-Samit
The Apostle of Allah ( peace be upon him ) said: Gold is to be paid for with gold, natural and coined, Ag with Ag, natural and coined ( in equal weight ) , wheat with wheat in equal step, barley with barley in equal step, dates with day of the months in equal step, salt by
salt with equal step ; if anyone gives more or asks more, he has dealt in vigorish But there is no injury in selling gold for Ag and Ag ( for gold ) , in unequal weight, payment being made on the topographic point. Make non sell them if they are to be paid for subsequently. There is no injury in selling wheat for barley and barley ( for wheat ) in unequal step, payment being made on the topographic point. If the payment is to be made subsequently, so do non sell them.
/Book 16, Number 3378: /
Narrated Urwah ibn AbulJa ‘d al-Bariqi:
The Prophet ( peace be upon him ) gave him a dinar to purchase a sacrificial animate being or a sheep. He bought two sheep, sold one of them for a dinar, and brought him a sheep and dinar. So he invoked a approval on him in his concern dealing, and he was such that if had he bought dust he would hold made a net income from it.
/Book 16, Number 3380:
Narrated Hakim ibn Hizam:
The Apostle of Allah ( peace be upon him ) sent with him a dinar to purchase a sacrificial animate being for him. He bought a sheep for a dinar, sold it for two and so returned and bought a sacrificial animate being for a dinar for him and brought the ( excess ) dinar to the Prophet ( peace be upon him ) . The Prophet ( peace be upon him ) gave it as alms ( sadaqah ) and invoked approval on him in his trading.
Earnestness on Gold Dinar
The information below is proposed by Dr.Mahathir,
If the Muslims are traveling to protect themselves they must hold sufficient wealth. Allah has endowed Muslim states with unlimited wealth. Today trade between Muslim states is little. It is non suggested that we cut down our trade with the non-Muslims.
We can merchandise through the exchange of goods, through swap. But today we use money. Since we do n’t hold a currency which is strong plenty and stable plenty in exchange rate footings, we have to utilize the American dollar. But the dollar is besides non stable. Today the dollar has depreciated against many other currencies. This means that despite the addition in the monetary value of oil for illustration, we are really gaining less due to the devaluation of the dollar. It is the same with the other currencies. It is the same with our ain currencies.
The ground for this is that paper currency has no intrinsic value. You can publish any figure you like on currency notes but in exchange rate footings the figure means nil. The Malayan Ringgit is 3.8 to one U.S. Dollar. The Turkish Lira is 1.5 million to one U.S. Dollar. The Indonesian Rupiah is 9000 to one U.S. Dollar. The buying power within the state is different from the buying power outside the state. Sometimes states have every bit many as four exchange rates — one functionary, one for domestic economic system, one for export and one for import. Clearly this state of affairs in footings of international finance is helter-skelter.
If we want to avoid being short-changed we must hold a currency that has intrinsic value. Gold does fluctuate in monetary value but the fluctuation is minimum. It is non possible to devaluate gold by one hundred per centum or one thousand per centum. Nor is it possible to appreciate gold by the same per centum. The fluctuation in the value of gold can merely be by a few per centums, up or down.
When the Allied states met in Bretton Woods to find the rule for the rate of exchange of international currencies in order to ease trade, they decided to utilize gold as a criterion. The value of the U.S. Dollar was fixed at one dollar for 1/35 ounce of gold or 35 U.S. Dollars per ounce. This worked rather good until some states wanted to devaluate their currencies in order to go competitory in the international market. Then other states besides decided to devaluate in order to stay competitory At this phase the gilded criterion could non be sustained. The market claimed that it could find the exchange rate through the demand and supply of currencies freely traded in the market. But profiteers moved in and they manipulated the value of the currencies so that there was pandemonium in footings of exchange rates of currencies. Business became really hard. This lawlessness in the international fiscal government will stay because it benefits the rich and the powerful. If we want to protect ourselves we must germinate our ain payment system. The Gold dinar can supply the currency for trade between states. If we value all trade points against gold, so we will hold no job with the exchange rate. We know that in the last resort we can run the gold and sell it in the market. You evidently can non make that with paper currency, worst still with figures on a computing machine. They have no intrinsic market value. It is non intended to utilize the gold dinar as currency for mundane minutess in the domestic market. For this we can utilize national currencies. If there is rising prices so the currency can purchase less gold and other goods. And frailty versa. So there is no necessity to transport bags of gold coins for dealing within the states.
But even for international trade the conveyance of gilded bullions or gold coins would be really minimum. Through bilateral payments arrangements the imports can be balanced by the exports and the differences settled in gold dinars. The Central Bank can supply a warrant for the gold required for the payments of the balance. In the undermentioned hebdomads or months the shortages may be reduced or a excess achieved. In that instance the payments of the balance can be made through accounting agreements between the Central Banks. It is merely on occasion that a necessity might originate for the existent gold dinar to be used to pay for the purchase of imports.We can non truly verify the sum of money a state has. A state ‘s ain currency can non be regarded as its modesty. But gilded dinars can function as a state ‘s modesty.
Assuming that Malaysia exports to a Dinar Area state a hundred million Dinars worth of motor vehicles and so imports 110 million dinars deserving of oil, so the payment required by Malaysia would be merely 10 million dinars. The 10 million dinars is credited to Malaysia ‘s trading spouse. If in the following month the trading spouse buys 110 million dinars deserving of Malayan autos and Malaysia buys 100 million dinars deserving of oil, so no payment demand to be made by either party. The 10 million dinars that has to be paid by Malaysia ‘s trading spouse for the motor vehicle can be offset by the recognition of 10 million dinars.
Gold is a cherished affair. There has ne’er been a clip when there was no demand for gold. It is besides non so plentiful that its monetary value will fall the manner paper currency or even other cherished metals can fall. Yet it is non so limited in measure that anyone or any bargainer can corner it.
In different states the monetary value of gold will differ in footings of the currency of that state. That is a map of the currency of the state. The value of one gold dinar is one gold dinar no affair what the exchange rate of a currency is against the gold dinar. If the value of goods or services is expressed in gold dinar, the value remains the same.
Therefore an exporter can declare the in agreement monetary value in dinar to the importer in another state and to the Central Bank in his state. Depending on the understanding reached the Central Bank will pay the exporter the current local currency equivalent to the gold dinar monetary value. At the importer ‘s terminal, he would pay to his state ‘s Central Bank the local currency equivalent of the in agreement monetary value in dinar. At the terminal of the hebdomad or month the Central Banks will number up the value in dinar of the exports and imports between the two trading states. If they are non balanced so the state with a excess will hold a recognition history against the state with a shortage. The difference can be paid in dinar or in goods or the state with the excess can keep the dinar for future purchase from the state in shortage.
Provided there are goods or services to be supplied by all take parting states, the sum of gold dinars that needs to be kept as modesty backup and for payment in the last resort is really little. Ideally there would be no demand to transport and pay in dinars. The imports and exports in most cases would call off themselves. The net incomes come from disposing of the goods or services domestically when the local currency would be used.
There will be jobs of class. But there are jobs now. States with no “ difficult currency ” i.e. U.S. dollars can non pay for their imports anyhow. In add-on the U.S. currency is non every bit stable as gold. Not merely can it appreciate or deprecate widely but a state ‘s currency can be made to deprecate so much against the U.S.Gold monetary value can besides be manipulated but non every bit easy as U.S. Dollar or other currency.
However local currency monetary values of gold can still fluctuate if left to the market. It is up to the state concerned whether to command exchange rates or non. But guess and use will non be every bit easy as when local currency is valued against the U.S. Dollar.
It must once more be stressed that the Gold Dinar is entirely for international trade. It is non to be used as local currency. In a sense it is like the U.S. Dollar now. Some states of class use the U.S. Dollar locally for paying hotel measures by aliens. But the dinar is heavy and cumbrous to transport. So it can non be used every bit freely as the U.S. Dollar locally. This once more lends credibleness to the dinar and the local currency, which has to be used for local payment.
We should non be excessively ambitious as to establish the Gold Dinar for multi-lateral trade at one spell. We should get down by partner offing off the states willing to utilize the Gold Dinar. A brace of good trading states with a reasonably good balanced trade should originate the usage of the Gold Dinar. Problems that arise can be resolved and the system improved. After the bugs have been got rid off so the trade utilizing the dinar can be expanded bit by bit to affect more states.
Traders in peculiar will be happy because their monetary values in Gold Dinar would non be affected by alterations in the exchange rates of the importation states or the exporting states. It is non the purpose to do the dinar a common currency for all states. It is non truly the Gold Standard with a fixed value against local currency. If states print more local currency at that place would still be rising prices within the state. But trade would be stable and enhanced. Speculators and operators will non be able to sabotage international trade.
Of class the Gold Dinar can be a trading currency, for all states, non needfully Muslim states. But Muslim states are in the best place to show the viability of the system. They are in a place to pull off their economic systems rationally and in the procedure show the universe that they are capable of turning with stableness and in peace. And this will make more towards countering subjugations by their enemies than the ineffectual violent revenges.
The Impact on Social Order
Gold Dinar impact on Economy Social Order
Creation of a Focused Wealth Accumulation
In the context of the present system, wealth accretion could be divided into two classs, the unreal wealth and existent wealth.
The per centum of “ existent wealth ” to “ unreal wealth ” is non precisely known, for illustration: when a bank issues a recognition card, how much wealth is created before the charge rhythm? The decree money is good because the authorities says it is good.
But like all imperiums, there will come a crisis of “ assurance ” which will do a tally on the currency. The holders of the new “ electronic wealth ” will desire its full face value in paper, but the paper wo n’t be there which will do a migration from the paper to some “ trade good ” . The unreal wealth will be discovered and the economic system will fall in.
Creation Of Discipline Corporate Society
Asiatic Crisis 1997 has seen the importance of a discipline corporate society, which is portrayed through corporate administration as one of the steps to forestall another fiscal crisis. As set out in the Finance Committee ‘s Report, the definition of corporate administration is, “ the procedure and construction used to direct and pull off the concern and personal businesss of the company towards heightening concern prosperity and corporate answerability with the ultimate aim of recognizing long term stockholder value, whilst taking into history the
involvement of other stakeholders ” ( Securities Commission, April 2001 ) . Corporate administration as may be depicted from this definition is hence non merely about accomplishing concern prosperity but besides about guaranting answerability, a proposed theoretical model for set uping corporate societal coverage as a legitimate attempt and it is said to heighten transparence of
organisations and democracy in society ( Gray et al 1996 ) .
The execution of Gold Dinar could hold helped to better company ‘s corporate administration by bettering its transparence particularly in the investing country, one of chief subscribers for company ‘s income. For case, in the current international pecuniary system, arbitrage and guess is made possible due to the different currencies and the transverse exchange rate between them. However, through the usage of Dinar as individual currency, all these exchange rates are eliminated, which so would take any effort for guess and arbitrage. Notice, nevertheless, even though this could farther beef up and stabilise the economic system, it will merely work if a group of states such as OIC states willing to replace their currency with Dinar for international trade intents.
In add-on, in the present pecuniary system, there are concern minutess that involve something that is existent ( good and services ) and practical ( binary spot of computing machines ) ( Ahamed & A ; Hassanuddeen, 2002 ) . This state of affairs has widened the chance for corporate society to pull strings their operations that defeat the intent of corporate administration. Dinar, on the other manus, is existent and hence, each dealing is exchange merely within the existent sector. This will non merely warrant the point that the debut of Dinar will make harmonisation between money supply and existent sector, but besides heighten the creative activity of discipline corporate society.
Reducing Dependency On Debts
The apprehension of Gold Dinar as a feasible solution to better economic societal order prevarications in understanding failings of current pecuniary system. In the fiat money economic system, the wealth that the society gained will take to unreal wealth, as the wealth is non existent as compared to the Gold Dinar, which has its ain intrinsic value. Not merely this unreal wealth will ne’er last as comparison to existent wealth, it besides has created tonss of unneeded debts.
Looking at the nature of human existences who has no subject in carry throughing their demands and wants, paper money has encouraged society to pass more than what they are gaining through creative activity of debt. The utilizing of recognition cards is one of the illustrations to exemplify this state of affairs. This unreal dealing through recognition cards has made it hard for users to command their demands and hence doing them to maintain on disbursement without recognizing that their debt is increasing. Apart signifier this, when a card proprietor fails to settle his/her monthly
history, the bank will so enforce an involvement, which so increases his/her debt. This will besides falsify the development in societal order as most of the benefit will travel to the banking system that additions through the involvement charged.
This dependence on debt could hold been reduced by the debut of Gold Dinar whereby all minutess is gilded backed. In the dinar system, all minutess are instantaneous and take topographic point with existent financess. There is no demand for creative activity of intermediate recognition like recognition cards in the involvement based pecuniary system ( Ahamed & A ; Hassanuddeen, 2002 ) .
In add-on, Abdul Halim & A ; Norizaton, 2002 stated that Dinar system could contract the spread between the wealths and the hapless through the riddance of involvement as Gold Dinar has made it possible to present a banking system that discourage debt and promote Musyarakah or net income or loss sharing. This is due to the fact that each Dinar must be represented with existent money that contains a certain weight of gold and Ag, which make it hard to merely make or publish or commanding its supply and demand through the usage of involvement, as what has been done with paper money through bank loans
Controling Greed And Other Negative Elementss
In the Gold Dinar economic system, involvement is purely prohibited since the nature of Gold Dinar prevents itself from being compounded. One Gold Dinar could non be compounded because one Gold Dinar will merely be one Gold. The ground is because gold could non be created at will every bit compared to fiat money.
Therefore, Gold Dinar could merely be increased from existent gold production such as the geographic expedition of new gold excavation and production of gold. Furthermore, Islamic economic sciences prohibit taking and giving involvement, as this will powderize the economic system as a whole and promote unfairness between the rich and the hapless. This will be in line with Dinar economic system where, ideally, the rich would be able to help the hapless in the economic system from the payment of
zakat. In add-on, the Dinar economic system promotes Mudharaba ( net income and loss sharing ) and Musyarakah ( partnership ) concepts as the economic engine in the society.
Contradicts to the present decree system, which depend to a great extent on involvement and rising prices, with net income and loss sharing and partnership system, the society will turn out to be less individualistic and be more helpful to each other, which in return cut down poorness jobs.
In the current decree money system, we could see a batch of jobs arise due to poverty which led other social negative elements such as incest, colza, slaying and many more.
Another ground that could increase the negative elements in the decree money system is the nature of the fiat money, which could be rented out i.e. vigorish or involvement that promotes unemployment.
This is true because in economic system and finance, when man of affairs want to venture into concern they will hold to measure their chance cost of embarking into the concern. If the concern could merely supply a 4 per centum return as comparison to involvement given by the bank
at 10 per centum, the man of affairs will waive the concern and alternatively lease his money in the banking system ( Vadillo, pg 46, 1991 ) .
An Economic and Strategic
Response to Chaos
Mounting concern around the universe that the Bush Administration is frantically baleful to drive the universe into ageless warfare, while making nil to turn to the planetary financial-economic prostration, has led to the debut of a figure of defensive steps by states and groups of states moving in concert. One such step is the proposal for creative activity of a Gold Dinar, intended as a replacing for the dollar as the currency of trade among states. With a war against Iraq looming on the skyline, and U.S. menaces against Saudi Arabia intensifying in the constitution ‘s establishments and publications, it is progressively likely that the Gold Dinar policy will be implemented in the close term, among certain Islamic states at first, and potentially spread outing to include non-Islamic states.
Malayan Prime Minister Dr. Mahathir bin Mohamad hosted a two-day seminar in Kuala Lumpur on Oct. 22-23, called “ The Gold Dinar in Multilateral Trade. ” This was the 2nd major conference in Malaysia on this topic affecting representatives of members of the Organization of Islamic Conference ( OIC ) . The first conference, “ Stable and Just Global Monetary Systems, ” held in August, announced that the Gold Dinar would be implemented as a bilateral agreement between Malaysia and certain unspecified spouses by the center of 2003, and extended to many-sided understandings over clip. At the more recent seminar, Bijan Latif, the caput of Iran ‘s Central Bank, offered to back up the constitution of a secretariat in Malaysia to organize the development of the Gold Dinar policy. Dr. Mahathir supported the thought.
Not a Gold Standard
In his address to the October seminar, Dr. Mahathir made clear that the proposal was non intended to set up a gilded criterion ( as put Forth by fixated “ gilded bugs ” around the universe ) , but to return to the Bretton Woods policy of a gold-reserve system, which was destroyed when President Richard Nixon removed the dollar from a fixed nog to gold on Aug. 15, 1971, leting currencies to drift at the caprice of speculators. Dr. Mahathir reminded the participants, that after World War II, “ when the Allied states met in Bretton Woods to find the rule for the rate of exchange of international currencies in order to ease trade, they decided to utilize gold as a criterion. ” This worked until 1971, when “ the market claimed that it could find the exchange rate through the demand and supply of currencies freely traded in the market. But the profiteers moved in and manipulated the value of the currencies so that there was pandemonium in footings of exchange rates of currencies. ”
The Gold Dinar policy intends to return to the former, superior policy. Tan Sri Nor Mohamed Yakcop, an economic advisor to Dr. Mahathir, explained the system at the August conference as follows, utilizing trade between Malaysia and Saudi Arabia as an illustration: “ Malayan exporters will be paid in ringgit [ the Malayan currency ] by Bank Negara [ the Malaysian National Bank ] on the due day of the month of exports… . Similarly, the importers will pay Bank Negara the ringgit equivalent of their imports. The Saudi Central Bank will make the same for its exports and imports. Say, at the terminal of a three-month rhythm, the entire exports from Malaysia to Saudi Arabia is 2 million Gold Dinar, and the entire exports of Saudi Arabia to Malaysia is 1.8 million Gold Dinar. Therefore, for that peculiar three-month rhythm, the Saudi Central Bank will pay Bank Negara 0.2 million Gold Dinar. The existent payment can be by manner of the Saudis reassigning 0.2 million ounces of gold in its keeper ‘s history in the Bank of England in London, to Bank Negara ‘s history with the same keeper. The of import point to observe here, is that the comparatively little sum of 0.2 million Gold Dinar is able to back up a entire trade value of 3.8 million Gold Dinar. ”
The failing of the system as it is now proposed is that gold, excessively, is capable to guess, particularly if it is pegged to a currency such as the dollar, which is heading for a dip due to the prostration of the U.S. banking system. Dr. Mahathir is cognizant of the job: “ Gold monetary values can besides be manipulated, ” he said, “ but non every bit easy as the U.S. dollar or other currencies… . Guess and use will non be every bit easy as when local currency is valued against the U.S. dollar. ”
EIR Founding Editor Lyndon LaRouche has proposed that the necessary return to a Bretton Woods system of fixed exchange rates must besides nail down currencies to a “ basket of trade goods ” instead than to gold, as a agency of establishing currency ratings to the existent economic system, instead than binding the existent economic system to a bad entity ( see Documentation ) . Although the Gold Dinar proposal assigns a value to gold in footings of dollars, Dr. Mahathir suggested in his address that he is believing along the lines of a “ basket of trade goods ” : “ The value of one Gold Dinar is one Gold Dinar, no affair what the exchange rate of a currency is against the Gold Dinar. If the value of goods and services is expressed in Gold Dinar, the value remains the same, no affair which state is involved in the trade. ”
Whatever the instance in this respect, the treatment and execution of the bilateral or restricted many-sided Gold Dinar policy can supply a much-needed defence against the prostration of the dollar-centered fiscal system, and could lend to a more lasting planetary solution in the close hereafter.
Dr. Mahathir emphasized that the Gold Dinar policy is being driven by the suppression world of the economic and strategic crisis. The black state of affairs in the Holy Land, the terrorist onslaughts of Sept. 11, 2001, and the threatened war on Iraq, have resulted in “ the whole universe ‘s economic system being unable to turn, ” he said. “ The West, and in peculiar the Americans, are really angry. So are the Muslims. Angry people can non move rationally. ” He concluded his address: “ Of class, the Gold Dinar can be a trading currency for all states, non needfully Muslim states. But Muslim states are in the best place to show the viability of the system, … and in the procedure, show the universe that they are capable of turning with stableness and peace. And this will make more towards countering subjugations by their enemies, than the ineffectual violent revenges. ”
Other voices are besides warning that the current folly in Washington will merely rush this interruption from the insolvent IMF system. James Sinclair, the caput of the excavation company Tan Range Exploration, said in an Oct. 28 column in Financial Sense Online: “ It is perceived, and right so, that the Islamic universe is controlled via the usage of the U.S. dollar as the chief colony currency… . I am told there is a important possibility that when the U.S. onslaughts Iraq, the united Islamic salvo back will be at the U.S. dollar via the Gold Dinar. ” The Saudis, he says, “ are less likely than most perceivers think to deliver the dollar this clip. ”
In fact, the Saudis are already repatriating sedimentations from the United States, as reflected in the addition by $ 30 billion in sedimentations in Saudi Bankss in September.
Sinclair besides notes, as did Bijan Latif of the Persian Central Bank, that “ the constitution of a gold-based currency is rebellion against the IMF, as it is clearly out under IMF regulations. ” Sinclair adds: “ The coming of the Gold Dinar would be the ‘nadir ‘ of the IMF and World Bank. ”
Other observers have noted the concern in Saudi Arabia that the United States may stop dead Saudi assets in U.S. Bankss, coercing them to see the Gold Dinar as a replacing for the dollar, and dumping dollar retentions wholly if necessary. Equally astonishing as this sounds, given the long history of U.S.-Saudi friendly relationship, there has been a rub-a-dub of anti-Saudi craze in the United States late, intensifying since the ill-famed presentation before the Defense Department ‘s Defense Policy Board on July 10 by the RAND corporation ‘s Laurent Murawiec, which declared Saudi Arabia the female parent of all panic, and naming for the overthrow of that state ‘s authorities and other Arab “ absolutisms ” ( see EIR, Aug. 16, 2002 ) . Although Murawiec was fired by RAND for this mindless fulmination, Richard Perle, who runs the Defense Policy Board, was ne’er publically reprimanded, allow entirely fired, and the Saudis took note.
Even more blatant was the study issued by the taking think-tank of the American constitution, the Council on Foreign Relations, in October, “ Terrorist Financing. ” The study is the work of a undertaking force, headed by Maurice “ Hank ” Greenberg of the AIG insurance trust, himself a ill-famed money-launderer. The study castigates Islamic charities in general, but hits Saudi Arabia in peculiar: “ For old ages, persons and charities based in Saudi Arabia have been the most of import beginning of financess for al-Qa’ida ; and for old ages, Saudi functionaries have turned a blind oculus to this job, ” says the study. Making their purposes clear, the CFR adds: “ It may good be the instance that if Saudi Arabia and other states in the part were to travel rapidly to portion sensitive fiscal information with the U.S. , regulate or shut down Islamic Bankss, incarcerate prominent Saudi citizens or render them to international governments, audit Islamic charities, and look into the hawala system-just a few of the stairss that state would hold to take-it would be seting its current system of administration at important political hazard. ” However, they argue, the Bush Administration must continue, and halt pretense that “ Saudi Arabia is being concerted, when they know really good all the ways in which it is non. ”
With this lunacy as constitution policy, the Saudis, and others, may good see no pick but to draw out of the dollar-based system. This is one ground for the great involvement in LaRouche and his proposals in the Mideast today. It may good take to the timely acceptance of the Gold Dinar policy among Islamic states, and progress toward a New Bretton Woods pecuniary system.